Australia’s leading building products manufacturer, Brickworks Limited  has gone live with accounts payable (AP) automation including complex routing for review/approval and receipting for processing invoices in Australia. It intends to roll the system out across New Zealand in late June.

The platform was implemented by Australian and New Zealand solutions provider Efficiency Leaders, utilising Kofax scanning software with workflow implemented on the Efficiency Leaders Automation Platform (ELAP).

Listed on the Australian Stock Exchange since 1962, Brickworks Limited is comprised of three divisions - Building Products, Land and Development and Investments. Brickworks Building Products has a long history as a supplier of building materials dating back as far as 1908. The company has a portfolio of well known brands such as Austral Bricks, Austral Masonry, Austral Precast, Bristile Roofing and Auswest Timber.

Brickworks employs over 1200 staff and has operations at over 65 different locations across Australia and New Zealand as well as a distributor network that supports export sales to countries such as Japan, Taiwan, Korea and the Middle East
General Manager Finance, Damien Frost, arrived at the company in 2007 to find a paper-based workflow in place to deal with around 10,000 invoices a month.

“Invoices getting lost was quite common and they bounced around different locations trying to find the right person to approve them,” said Frost.

The typical flow of invoice processing was to create a manual purchase order, then upon receipt of the goods the invoice would be stamped, reviewed and approved by a manager who would sign it and then send it to accounts payable with the purchase order attached. The data would be keyed into the ERP system, generate a batch that would be reviewed by a manager who would manually review the invoices again before the batch was released for payment.

“We did a process flow analysis and found that an invoice was generally touched eight times by our staff. We had over a dozen staff doing data entry in accounts payable alone, our processes were 10 years behind where we needed to be ,” said Frost.

The large number of suppliers, over 11,000 individual firms, meant a wide variety of invoice formats are received and thus any automation project would have to address the requirement of extracting the invoice data without the use of templates, before entry into Brickworks Maximize ERP software.  Additional complexities facing AP automation included multiple currencies, multiple versions of the ERP system and more than 20 company entities that would need to reference the different versions depending on the recipient company that was invoiced.

However the implementation of Accounts Payable automation would have to wait until the completion of a major overhaul of Brickworks’ IT infrastructure which took two years to complete. This included the introduction of server virtualisation at two new data centres in Sydney and Perth, as well as an upgrade of telecommunications and deployment of a Citrix environment.
The overhaul also included an upgrade to Windows Server 2008 and Office 2007, with Exchange replacing MailDaemon as the company email platform. SharePoint was also introduced.

The IT upgrade completed, in mid-2010 Frost revisited the plan to implement document scanning and OCR.

Efficiency Leaders was eventually selected as the implementation partner and board approval obtained for the project, which Frost considers will have significant savings across the business as a whole.

“I talked to a few vendors but I really wanted someone we could partner with.  The ELAP software looked to be more user friendly.

“There're a lot of solutions out there for AP scanning but we can see other opportunities in customer ordering, HR and payroll and so on.

“AP was an easy win but working on the next stage was key to us.

“We did look at outsourcing it but decided it was not for us. We see massive benefits in things outside of AP and to a large degree we like to control our own destiny.”

Brickworks worked closely with its ERP supplier to enable it to raise and approve purchase orders on line rather than manually, so that these would be able to be automatically matched with scanned invoices.

After a series of initial tests at one location, Brickworks invested in Fujitsu desktop scanners and is in the process of redirecting more than 11,000 suppliers invoices to a centralised Locked Bag postal address.

An email inbox was also established for electronic delivery of PDF invoices, although the nature of the construction industry  means paper transactions still dominate.

The solution includes Kofax Capture and Kofax Transformation Modules integrating with Maximise Financials. The solution has been built with Microsoft SharePoint 2010 at the core, providing user interaction for both workflow and image and data storage.

Skelta BPM.NET is used to workflow invoices for approval. The solution delivers automatic classification and separation of documents, without the use of separator sheets, barcodes, labels etc.  It handles single page, multi-page and 2-sided invoices within one batch and intelligently separates the invoices automatically.  The solution also caters for supporting documents which are combined with the invoice and stored as one file linked to the finance system, enabling easy retrieval when the need arises.

Lee Fisher, CEO of Efficiency Leaders, said, “Brickworks wanted Kofax, SharePoint and Workflow to all use the same business logic with minimal replication of rules/effort. We created our own .NET web service and all logic is being called from the various applications, meaning one source of truth for business process rules and that we could deploy the solution without customised DLLs to each Kofax client. This is very innovative.

*SharePoint 2010 had never been used at this level of integration. Making the user experience as seamless as possible required all products and parties to work closely together.”

After scanning, all invoices are still checked by an operator for accuracy, and then if the scanned invoice is matched with a purchase order it will go straight through to the ERP platform for payment.

Otherwise it is delivered in an ELAP workflow so that the PO raiser can action any unresolved items and in the case of non PO invoice, the appropriate manager receives an email with a digital copy of the invoice for approval. Once they submit it for payment it will check the manager has the right authority as set out in the ERP system.

Frost has been impressed with the Kofax OCR software.

“The scanning is quite accurate, and the software learns so the amount of physical intervention from AP staff is reducing,” he said.

In our test locations we have had around a third of invoices going straight through with a match to a PO. If I am able to replicate that across the business our savings will be significant and our ultimate target is even higher than that.
“We wanted to have the image of the invoice available from within our ERP system and one of the factors that weighed in Efficiency Leaders favour was the fact that they specialise in integration to SharePoint, which we had, and configuration for storage.

“We can now go into our ERP software and click on a link to view the associated paperwork relating to the transactional information, which across 65 sites has been magic and saved a lot of phone calls and emails.”